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When should you have a contract for business?

On Behalf of | Jun 16, 2021 | Civil Litigation

Contracts can clarify a situation. They offer protection for all parties involved and are an essential part of business.

FindLaw explains you should have a contract anytime you make a deal with someone else for work, products or anything at all in a business setting. Without a contract, you have little way to protect yourself should something go wrong with the deal.

Contract defined

A contract is a legal agreement. It requires an offer and acceptance. You can also include conditions that define rights under a contract. Typically, it will spell out the duties of each party.


The main reason to have a contract is that it provides you with the legal basis to bring a lawsuit against the other person if he or she fails to carry out the terms of the agreement. If you do not have a contract, it can be difficult for the court to make a ruling as it will have no proof of the original agreement, and it will become a he said/she said type of case.

Written vs oral

A contract can be written or oral. Written contracts are the better option for a few reasons. They allow you both to see the terms in writing and give you time to review them. Second, putting it in writing creates a record you can use later to refer to or to bring in front of the court. Finally, it prevents confusion over the terms and details, which can easily occur if you only have an oral agreement. The law requires some contracts to be in writing.

It is almost always in your best interest to create a contract for any type of business dealing.